AFL to consider luxury tax

Football writer with The Age

The gap between the top four and bottom four clubs in net club-sourced revenue has also increased in the past eight years, from $4.7 million a year in 2004 to $7.3 million last year. Photo: Joe Armao

A TAX on football department spending and shared match-day revenues are among several new socialist measures being considered by the AFL.

The league has also proposed taking greater control of clubs' revenue streams and increasing the centralised pool of money distributed to struggling clubs amid concerns the rich clubs are ''outpacing'' the rest of the competition.

The ''luxury tax'', as floated in a discussion paper sent to clubs as part of a review of the AFL's equalisation policy, would not lead to clubs being restricted by a cap on their football department spending.

It would instead mean that clubs that exceeded a predetermined level of non-player football spending are taxed - say, 20¢ in the dollar once they passed the limit - with the money placed into a central pool.

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Another proposal would mean clubs would split game-day revenue, including gate receipts and possibly including reserved seats and membership takings.

Home clubs retain all gate receipts, although Collingwood and Essendon are among the few clubs that split the takings from their two games each season.

Many of the poorer clubs struggle to profit from home games, such as the Western Bulldogs at Etihad Stadium, highlighting the gulf between them and the wealthy sides.

Figures sent to clubs last month as part of a discussion paper on the AFL's equalisation policy show the richest four clubs have generated an average $10.7 million a year of club-sourced revenue since 2004, more than $6 million above the bottom four clubs and well above the $7.4 million league average.

The gap between the top four and bottom four clubs in net club-sourced revenue has also increased in the past eight years, from $4.7 million a year in 2004 to $7.3 million last year. Net club-sourced revenue includes such things as sponsorships, signage, events, fund-raising, hospitality, match receipts, membership and merchandise.

The big four clubs have also broken further away from the eight middle-tier teams, with the gap rising from $2.7 million in 2004 to $5.2 million in 2012, and the richest clubs also proving the most successful.

The performances of the AFL's two new clubs - Gold Coast and Greater Western Sydney - was not factored into the figures circulated to clubs.

The AFL's research has noted that the ''larger'' four clubs have featured in the finals 21 times in the past seven years, compared with just 12 appearances by the four smallest clubs.

In the past four years, the four smallest clubs have made it to September just three times, compared with 10 appearances by the four richest clubs.

Further research has shown the rich clubs are also outscoring the others - a gap that has widened in the past two seasons.

Clubs have also been asked for their thoughts on taxes or levies being applied to club-sourced revenues beyond the $2 gate levy that is currently applied to adult tickets, as is the case in most major North American sports such as the National Basketball Association and Major League Baseball.

This idea would result in the larger clubs paying more into the pool than they receive, and the smaller clubs receiving more than they contribute.

The AFL has also asked for feedback on a proposal that would give the league control of more of the clubs' revenue streams for distribution to the poorer clubs - something that would be applied where the league was able to generate a larger return than the clubs could.

Clubs have been asked to submit their thoughts on the equalisation policy by next week, ahead of a meeting of the chief executives, presidents and AFL executive in March.